Problem 1

The following data about Maxwell Company is given for the month of August.

August 1Inventory 800 units at P10

12Purchase 1,000 units at P12

14Purchase 500 units at P11.50

16Issue 800 units

18Purchase 600 units at P15

20Issue 500 units

25Purchase 400 units at P14

28Issue 800 units

Required:

1.Using FIFO method of costing materials, how much is the cost of ending inventory for August?

2.How much is the cost of materials issued or used for production?

3.How much is the total goods available for sale?

PROBLEM 2

Using the data in problem 1 above and using weighted average, compute for

a.Weighted average unit cost

b.Cost of ending inventory

c.Cost of materials issued

1.Using Moving average method, compute for

a.Cost of ending inventory

b.Cost of materials issued

PROBLEM 3

Use both FIFO and WEIGHTED AVE in computing the required balances:

June 1 Balance800 @ P4.00

June 3 Issued50

June 5Purchased300 @ P4.50

June 6 Issued250

June 15Issued400

June 18Purchased300 @ P5.00

June 25Issued100

1.Using FIFO method compute for the cost of

a.Inventory Value

b.Materials Issued

2.Using average method compute for the cost of

a.Inventory Value

b.Materials Issued

PROBLEM 4

The following information pertains to CACHING Corporation's Material X:

Annual Usage25,200 units

Working days per year360 days

Normal lead time in working days30 days

Safety Stock1,050 units

The maximum lead time in working days and the reorder point for Material X are

PROBLEM 5

Using the EOQ Model, Tokyo Company computed the economic order quantity for one of the materials it uses in its production to be 4,000 units. The Company maintains safety stock of 300 units. The quarterly demand for the material is 10,000 units. The order cost is 200 per order. The purchase price of the material is P4. The annual Inventory carrying cost is equal to 25% of the purchase price.

1)What is the annual inventory carrying cost?

2)The total inventory order cost per year is

PROBLEM 6

The following information pertains to AAA Manufacturing Company's Product X:

Annual Demand33,750 units

Annual cost to hold one unit of inventoryP15

Setup cost (or the cost to initiate a production runP500

Beginning inventory of Product X0

At present, the company produces 2,250 units of Product X per production run, for a total of 15 production runs per year. The Company is considering to use the EOQ model to determine the economic lot size and the number of production runs that will minimize the total inventory carrying cost and setup cost for Product X.

1)At present, the company's total annual inventory costs is

2)If the EOQ model is used, the economic lot size is

3)If the EOQ model is used, the number of production runs should be

4)If the EOQ model is used, the total annual inventory costs, compared with that under present system, will increase (decrease) by